Survey Finds Local Family Business Owners Somewhat Optimistic

Published:

Monday, December 19, 2016 6:31 PM

According to a recent quarterly survey conducted by the Goering Center for Family and Private Business, local family business owners remain somewhat optimistic about business conditions, even though there are uncertainties regarding the global and national economies.

According to a recent quarterly survey, local family business owners remain somewhat optimistic about business conditions, even though there are uncertainties regarding the global and national economies. The responses suggest that area family businesses are still trying to find their footing in the economy, feeling positive about the near future but perhaps not convinced that economic growth will be strong enough to take on the risk of investing in the expansion of their businesses. That optimism may be fading; however, as the share of businesses responding positively on most indicators has declined since the previous quarter. In most of the categories, local business owners are more positive than similar business owners throughout the nation.

The graph below shows that in most of the survey categories a majority of local family business owners expect the economy to improve. This includes positive expectations for higher real sales and higher earnings. The majority of those surveyed also expect to increase employment in their businesses and have seen a decrease in their current job vacancies. Note that the current job vacancy scale runs opposite the other scales, i.e. a lower scale represents stronger expectations. Most of those surveyed do not believe that now is a good time to expand and they do not plan capital expenditures. Slightly fewer respondents expect better credit conditions than expect conditions to worsen in the future.

The graph also depicts results from the local survey so that they can be compared with the responses to the National Federation of Independent Businesses’ (NFIB) monthly survey of small and independent businesses throughout the nation. Each item is listed, with the vertical axis giving the net percentage difference between positive respondents and negative respondents. Respondents reporting “no change in expectations” are not counted against these totals. Local responses differ from the national in many of the categories. In two categories, good time to invest and plans to make capital expenditures, the national respondents were more positive. In the other six categories, the local respondents reported more positive conditions or expectations than their national counterparts.

Compared to the Spring 2012 survey, a smaller share of local firms believes this is a good time to expand, make capital outlays or increase hiring. Similarly, fewer anticipate more favorable credit conditions or overall improvement in the economy. Only the expectation of sales growth increased.

Goering Center Survey

Other indicators:

Other economic indicators also suggest that the economy is not growing strongly. Nationally, the Conference Board’s Consumer Confidence Index has continued to fall since April of this year (from an index value of around 70 to 62). National inflation has slowed to 1.7 percent, comparing May of this year to last, nearly half of the historical US average.

This inflation rate is roughly half of the 3.6 percent experienced this same time last year.The real estate market is holding steady both locally and nationally. According to the National Association of Realtors’ Local Market Report for the Cincinnati Metro Area, median home sale prices in the first quarter of 2012 were roughly 0.3 percent lower than the same time last year.

The report notes that new construction remains low and the number of foreclosures continues to rise.National Real Gross Domestic Product (rGDP) growth in the first quarter of 2012 was considerably higher than the same quarter of 2011, 1.9 percent relative to 0.4 percent. Also nationally the number of employed is increasing, further suggesting that the national economy is holding steady. National unemployment is also rising, indicating that the more people are entering the market than jobs are being created. Locally, however, while the number of employed is rising the unemployment rate has fallen. This pattern suggests that vacancies are being filled more easily locally. The Greater Cincinnati Family Business Survey is conducted quarterly. For further information, please call Sid Barton, PhD, at (513)556-7185 or email Sid.Barton@uc.edu.